What is the value of Meme? Explore the financial and social attributes of Meme

Original title: "A Social and Financial Study of Memecoins"

Every market cycle is accompanied by the emergence of Meme tokens. A group of people rallies around a Meme to temporarily drive up the price of an asset (anywhere from a day to a few months). In the cryptocurrency world, this has become a popular marketing strategy covering everything from the blockchain layer to the application layer, because it not only increases the price, but also attracts attention to the ecosystem. Some projects, like Avalanche, have even gone a step further and created dedicated meme token funds.

The line between Meme tokens and other types of cryptocurrencies may not be very clear, but generally the value of Meme tokens is mainly supported by the Meme culture associated with them, rather than actual economic activity or technical support. . Like DOGE, which is mainly supported by the image of Shiba Inu and related concepts. In contrast, tokens such as ETH, UNI or MKR are backed by more complex technical and economic mechanisms, such as Ethereum, the Uniswap protocol or collateralized minting stablecoin services.

Farcaster’s Meme tokens (such as DEGEN) are the latest style tokens. Their main advantage is that social media information and community discussions are completely open. Therefore, I want to use some basic data to analyze social media information, community discussion and financial data.

1. Measuring Meme

I first assume that we can compare the financial and social status of all Meme through a chart:

I have categorized five main areas in this chart:

• Extreme Risk: Meme tokens with low liquidity and trading volume are very Dangerous, and susceptible to sell-offs (as there may only be a handful of people providing liquidity);

• Bot Arena: Most Meme Tokens Never We will not get out of this phase, where thousands of coins (many with the same token name/variant) compete for community and funding attention;

• Volatile Growth: Meme tokens that broke out of their initial circle must now maintain their momentum and growth. You may see the price fluctuate 100-500% in one day, in different directions, and a bunch of KOLs will start to follow this Meme.

• Well Established: The leader will be at the top of social media platforms and funding for the long term and be clearly differentiated from other Meme tokens. Weekly numbers may be less volatile and attention is sustained as the inflow and outflow of people is balanced.

• Sleeping Giant: Those Meme tokens that have grown rapidly in terms of community and funding, but have not suffered from sell-offs, may be in this corner There was silence for a while. A DAO may have been formed and they started and dealt with the chaos in the community. At the same time, they want to be in the spotlight again.

Most Meme Tokens should be trapped in the "Bot Arena", there are some attractive Meme Tokens in the "Volatility Growth" segment, maybe one or two reach "Established" Meme tokens. In the process, some may lose social power and become "sleeping giants", while others may lose financial support (liquidity) and become "extremely high risks."

I believe that a successful Meme token will usually go through the following stages:

You may see a lot of Meme tokens being pushed by bots/KOLs , resulting in a high social score, but a low funding score (liquidity), leading to sell-offs.

After a lot of data collection and sorting, I made this chart about the FarcasterMeme token on Dune:

It’s actually very close to what I expected Fittingly, you can see DEGEN far up in the upper right corner, and then there are some others like ENJOY, HIGHER, TN 10 0X and EVERY in the middle. Everyone else is stuck on the left, competing for attention and liquidity.

It’s worth noting that I haven’t filtered out bots here, so the social ratings of some Meme tokens may be skewed. This is the direction of future improvement!

Now, let’s work backwards from the final chart to explain how these two scores are created. I will also pose further research questions and detail the origins of my inquiry for those wishing to dig deeper.

Dune’s dashboard can be found here, along with some charts that I didn’t cover in this article.

2. Social Score

Each score consists of a "basic" component and a "growth" component. For social scoring, we first measured currency mention casts (posts) and engagement. Therefore, in this approach, "$DEGEN" will be evaluated, but "DEGEN" will not.

The above provides our five main columns:

• Throwers: The number of people who have dropped to a fixed category

• Receivers: Throwers who have previously received the token Percent of

• Number of throws: The number of throws to a fixed category

• Channel: Once Number of channels that deliver to a fixed category

• Activity level: engagement (likes + replies) plus the cube root of the number of placements multiplied by the number of channels.

• #Activity level: Engagement (likes + replies) plus number of impressions multiplied by the cube root of the caster multiplied by the cube root of the channel.

The overall social score is based on activity level, with a "growth" multiplier based on changes in publisher and recipient volume within a week. The idea here is that if you see a significant increase in the number of people investing in a fixed category and those people buying/acquiring tokens, that's an extremely healthy sign.

In general, it looks like this in the table:

3. Financial Score

The following are the main financial indicators:

• FDV: total supply times price

• Price: based on DEX trading Latest Price

• Daily Growth, Weekly Growth, Monthly Growth Price Change: Percent change in price on daily, weekly and monthly basis

• Liquidity: This is non-token liquidity, meaning that for the DEGEN-WETH pool, we only count the WETH portion of it. This gives us a more stable indication of how much good liquidity there is for a given coin.

• Transactions: Number of DEX transactions in the past 30 days

• Transfers: The past 30 days Number of ERC-20 token transfers

• Total volume: USD volume of DEX transactions over the past 7 days

The "basis" of the financial score is its non-token liquidity and DEX trading volume, and the "growth" part is based on changes in liquidity.

Overall, it looks like this in the table:

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